News:
According to the data released by the General Administration of customs, China's crude oil imports in April were 43.03 million tons, an increase of 6.64% year-on-year and 0.74% month on month. Saudi Arabia is still the largest crude oil supplier to China. In April, the crude oil arrival volume of Saudi Arabia totaled 8.9323 million tons, with a year-on-year increase of 38.06% and a month on month increase of 30.24%. In the same period, China imported 6.5508 million tons of crude oil from Russia in April, an increase of 4% year-on-year and 2.55% month on month.
We believe that:
1. In 2021, China's total crude oil import volume was 513 million tons, of which 87.57 million tons and 79.65 million tons were imported from Saudi Arabia and Russia, accounting for 17% and 16% respectively. From January to April 2022, China's crude oil imports were 48.8 million tons, 36.34 million tons, 42.71 million tons and 43.03 million tons respectively, and imports from Saudi Arabia were 7.96 million tons, 6.65 million tons, 6.86 million tons and 8.93 million tons respectively, accounting for 16%, 18%, 16% and 21% respectively from January to April, while imports from Russia were 7.25 million tons, 5.41 million tons, 6.39 million tons and 6.55 million tons respectively, accounting for 15% from January to April. After the Russian Ukrainian war, the proportion of crude oil imported by China from Russia remained unchanged at 15%.
2. In 2021, Russia's crude oil export volume will reach about 5 million barrels per day. In terms of export destinations, 49% of Russia's crude oil is exported to the European OECD, especially the Netherlands (14%), Germany (10%) and Poland (6%), followed by Asia and Oceania (38%), most of which reach northern China and Russia's Kozmino port through ESPO pipeline, and further transport to China and Asian markets. China is the largest importer of Russian crude oil. In 2021, Russia exported 800000 and 800000 barrels / day of crude oil to China respectively through pipeline and sea transportation, totaling 1.6 million barrels / day (i.e. 79.65 million tons).
3. In April this year, Russia's oil export to the EU was 3.37 million barrels per day, down 580000 barrels per day from January to February; Oil exports to the EU accounted for 42% of Russia's total exports, down 8pct from 50% from January to February. From January to February this year, the Anglo American market accounted for 9% of Russia's total exports, but by April this proportion had dropped to 1%; In April this year, Russia's share of oil exports to India rose from 1% to 10%, and its share of oil exports to Turkey Rose from 2% to 5%. Therefore, most of the decline in Russian exports to the European Union, the United States and the United Kingdom has been offset by the increase in exports to India and Turkey, while the proportion of Russian oil exports to China remains unchanged at 21%.
4. Although in terms of quantity, the crude oil imports of China and India far exceed the crude oil exports of Russia, based on the long-term decentralized crude oil import structure of China and India, the construction of pipelines, ports, docks, ships and other infrastructure, as well as the means of financing, high transportation costs and reputation risks, we believe that it is difficult for Asia to fully undertake the crude oil transferred from Europe, However, the flow of Global trade will be completely changed, and the conflict between Russia and Ukraine will have a sustained and far-reaching impact on the crude oil market.
The production capacity cycle has triggered great energy inflation, and we continue to be optimistic about the historic allocation opportunities of energy resources such as crude oil. We believe that whether it is traditional oil and gas resources or American shale oil, capital expenditure is the main reason for limiting crude oil production. Considering that the global capital expenditure on crude oil is insufficient for a long time, the elasticity of global crude oil supply will decline. In the transformation of old and new energy sources, the demand for crude oil is still growing, and the world will face the problem of crude oil shortage for many years. The international oil price will usher in an upward turning point in 2022. In the medium and long term, the oil price will remain high for a long time, and the energy resources are expected to be in an upward cycle in the next 3-5 years. We will continue to be firmly optimistic about this round of energy inflation, Continue to be firmly optimistic about the historic allocation opportunities of energy resources such as crude oil under the capacity cycle.
Risk factors: the risk of re spread of covid-19 epidemic in the world; New energy sources increase the risk of replacing traditional oil demand; Risk of OPEC + alliance modifying production plan; The risk that OPEC + oil producing countries have insufficient production capacity and the production rate is lower than expected; The United States lifted sanctions against Iran, and the risk of Iran's crude oil returning to the market quickly; The risk of US policy adjustment on shale oil production, environmental protection and financing; Risk of global 2050 net zero emission policy adjustment.
